Letter before action for an unpaid invoice: what must it include? (2026)
A letter before action for an unpaid invoice sets out who is owed what and why, lists the invoices, states the statutory interest and fixed compensation claimed under the Late Payment of Commercial Debts (Interest) Act 1998 and whether interest is still running, explains how to pay, and gives a deadline after which you will issue a court claim. Against a company, 14 days is the usual deadline under the Practice Direction on Pre-Action Conduct. If the debtor is an individual, including a sole trader, the Pre-Action Protocol for Debt Claims applies: the "letter of claim" must give 30 days to reply and enclose an up-to-date statement of account, the Information Sheet, the Reply Form and a Financial Statement.
Company or sole trader: which rules apply
| Debtor is a company (Ltd, LLP, PLC) | Debtor is a sole trader or other individual | |
|---|---|---|
| Rules | Practice Direction – Pre-Action Conduct and Protocols | Pre-Action Protocol for Debt Claims |
| Name of the letter | Letter before action / letter before claim | Letter of claim |
| Time to respond | Reasonable time: 14 days in a straightforward case | 30 days from the date at the top of the letter |
| Enclosures | Copies of key documents (invoices, terms) | Statement of account, Information Sheet and Reply Form (Annex 1), Financial Statement (Annex 2) |
| Sending | Post and email | By post, dated, posted that day or the next; email in addition |
| If the debtor replies | Exchange information, consider settlement | At least 30 days after the Reply Form or requested documents; 14 days' notice before issuing if no agreement |
The Protocol states it "does not apply to business-to-business debts unless the debtor is a sole trader" (paragraph 1.1). If you are unsure whether the debtor is an individual, following the Protocol costs you nothing but time.
What to put in the letter
- Date at the top of the first page.
- Parties: your business name and address, the debtor's name and address.
- The debt: each invoice with number, date, due date, amount and what has been paid.
- Where it comes from: the order, quotation or contract, and its date. For an individual debtor, say that a copy of the written agreement can be requested.
- Interest and charges: statutory interest at 8% over the reference Bank Rate (11.75% for debts that became late in 2026), the fixed sums of £40, £70 or £100 per invoice, any reasonable recovery costs, and whether interest is continuing, with the daily amount.
- Total due at a stated date, with the calculation attached.
- How to pay: bank details, reference, and how to contact you to discuss payment options.
- Deadline and next step: the date by which you must receive payment or a reply, and that you will otherwise issue a claim in the County Court without further notice.
- For a sole trader: where to send the Reply Form, that the debtor can seek debt advice, and the enclosures listed above.
The late payment interest calculator builds the statement of account with statutory interest and fixed sums, and produces the letter before action or the Protocol letter of claim as a PDF.
Why the Protocol matters
Paragraph 7.1 says the court will expect the parties to have complied and will take non-compliance into account. Under the Practice Direction on Pre-Action Conduct (paragraph 16), a party at fault can be ordered to pay costs, and a claimant at fault can lose interest or receive a lower rate. Skipping the Reply Form or giving 7 days to a sole trader can cost you the interest you were claiming.
After the deadline
- Payment received: confirm in writing and close the file.
- Dispute raised: answer it, share documents, consider mediation; the Protocol (paragraph 6) encourages this.
- No reply: issue a claim. For a fixed money claim in England and Wales you can use Money Claim Online. Include the principal, statutory interest up to the claim date with the daily rate after it, and the fixed compensation.
FAQ
Is a letter before action a legal requirement? There is no statute requiring it, but the court expects pre-action steps and can penalise a claimant who skips them in costs or interest.
Can I send it by email only? For a company, email plus post is usual. For an individual debtor, the Protocol says the letter of claim should be sent by post, with email in addition if you have the address.
Do I have to print the Information Sheet and Reply Form myself? Yes. They are Annex 1 of the Pre-Action Protocol for Debt Claims, published by the Ministry of Justice. The Financial Statement is Annex 2.
How long should I wait before suing a sole trader who does not reply? At least 30 days from the date at the top of the letter, allowing for a reply posted near the end of that period.
Does this apply in Scotland? No. The Pre-Action Protocol and the Practice Direction are part of the Civil Procedure Rules for England and Wales. The 1998 Act on interest applies UK-wide, but court procedure in Scotland is different.